WASHINGTON – Irvine-based Vizio, one of the nation’s largest vendors of flat-panel TVs, will be watching with great interest Tuesday’s House Judiciary committee hearing on a bill that would curb the power of firms that buy up patents, then sue or threaten to sue companies making products tied to the patent.

Vizio knows something about being a patent target; it recently won its 10th case against patent assertion entities, which critics refer to as “patent trolls.”

Patent assertion entities that don’t produce items using the patents they own are referred to as non-practicing entities. They make money by accusing other firms of violating the patents and collecting settlements or legal judgments. In extreme cases, threatening letters are sent to mere users of tech gear or software – the tech-world equivalent of suing a homemaker over a recipe for toast, which, by the way, is patented.

Patent assertion entities cost the economy $29.2 billion in 2011, up more than fourfold from 2005, according to a 2012 study from researchers at Boston University Law School and Harvard University. The number of lawsuits more than quadrupled, to 5,842 in 2011.

The Innovation Act, introduced by Rep. Bob Goodlatte, R-Va., the chairman of the Judiciary Committee, would, among other things, force the patent litigation process to become more transparent, help to constrain litigation costs by setting up tighter guidelines and force the loser of a lawsuit to pay the winner’s legal fees.

The bill has 10 co-sponsors, including three Democrats. In the Senate, Vermont Democratic Sen. Patrick Leahy’s office announced it is working on similar legislation with Sen. Mike Lee, R-Utah.

Right now, patent holders aren’t required to provide much information when filing a lawsuit; court documents might say a product infringes on a patent, without detailing exactly what component of a product is alleged to be in violation.

Proposed guidelines would require patent holders to detail how different product components violate a patent.

Huang also praised a provision of the bill that would limit discovery, the fact-seeking portion of a lawsuit. Under the proposal, discovery would be delayed until after an initial hearing in which a judge determines the terms of a patent claim. When the scope of discovery is too broad, it can force a defendant to produce “hundreds of millions of pieces of information that may not have much relevance to the case,” Huang said.

If it became law, the bill could alter the landscape for Acacia Research Corp., a large Newport Beach patent assertion entity. Matthew Vella, Acacia’s president, has previously expressed support for a loser-pays provision, saying that it would restrain irresponsible firms.

On Monday, an Acacia spokesman said the company was still reviewing the Innovation Act and declined to comment until it had done so.

Robin Feldman, a patent law expert at the University of California Hastings College of Law in San Francisco, characterized the proposal as a good first step. Feldman released research last week showing that patent assertion entities are sensitive to legislative reforms and will attempt to work around them.

After the last reform effort, the America Invents Act of 2011, patent assertion entities rushed to court to file lawsuits before the provisions went into effect. The American Innovates Act briefly staunched the flow of suits, but they’re starting to pick up again, Feldman found.

“Legislative changes do have an effect,” Feldman said, “The challenge is: Can Goodlatte’s bill make the change be lasting and more effective?”

Feldman is optimistic, but says more follow-up will be needed. The Federal Trade Commission launched an investigation last month into patent assertion entities and private settlements, which have not been tracked. Lawsuits that actually go to court, Feldman said, are just the “tip of the iceberg.”

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